"Breaking News" in China?
 News media will often catch hold of a story when it becomes a catalyst for market volatility even if the news they are reporting isn't really all that new. China's economic growth has been slowing since the first quarter of 2010, when China's economy posted a 10.1% year-over-year increase. However, news coverage of the slowdown in China suggests this is somehow breaking news. The display on the lower right shows that the number of times the words "China" and "slowdown" have appeared in the same news story in key sources like The Wall Street Journal, Bloomberg News, Dow Jones Newswire, and The New York Times has risen sharply in recent weeks. Recognition that China's growth would slow has been in place for years, with the debate really focused on whether it would be a "hard landing" or "soft landing," and the recent spike in interest has been telling us more about the market mood than about China. China is the world's second-largest economy and what happens there matters, but the impact on the US has been relatively muted due to low export exposure. China still has a tough road to navigate as it transitions to a more consumer-focused economy, and the impact of its slowdown on commodity demand will be felt for some time, but until we learn something genuinely new, we'll continue to view the likely potential impact on US markets to be limited.
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Strategic Discussions Lunch: September 24, 2015
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Turning Duress into an Investment Strategy 
Presenters Daryl L. Deke Principal & CEO New Market Wealth Management Erik Knutzen, CFA, CAIA Managing Director & Multi-Asset Class CIO Neuberger Berman Agustin "Gus" Araya, CFA Founding Partner Cordillera Investment Partners Join us on September 24th for lunch and a thought-provoking discussion. Click here to learn more and to register.
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Last week investors saw wild swings in the capital markets as all major indexes fell into correction territory. However, by week's end the smaller cap indexes were roughly flat, the S&P 500 saw a modest gain and the tech-heavy Nasdaq enjoyed a substantial gain ending the week back in positive territory on the year.
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> GDP Revision: Last Thursday, the second-quarter Gross Domestic Product data was revised to an annualized growth rate of 3.7% which was above the consensus estimate of 2.3%. The report points to better-than-expected momentum going into the current quarter. Residential investment was strong, as was consumer demand with personal consumption gains tied to vehicle spending. Inventories and improvement in net exports also contributed to the second quarter growth. The impact of the revised GDP data on Fed policy for September's Federal Open Market Committee (FOMC) meeting may however, be minimal. Focus at the upcoming meeting will be on the state of the global financial markets and, very importantly, the strength of this week's employment report for August.  > Jobless Claims: Unemployment remains very low with initial claims down 6,000 last week to 271,000. The 4-week average rose slightly but is still lower than the month-ago comparison. The unemployment rate for insured workers is unchanged at a very low 1.7 percent. All the readings in this report are very low and suggest that any remaining slack in the labor market is very thin.
> Personal Income and Outlays: There's no hurry for a rate hike based on the July personal income and outlays report where inflation readings were very quiet. Core PCE (Personal Consumption Expenditures) prices rose only 0.1% in the month with the year-on-year rate moving backwards, not forwards, to a very quiet 1.2%. Total prices are also quiet, at 0.1% for the monthly rate and at 0.3% the yearly rate.
Consumer data shows a solid 0.4% rise in income which includes a 0.5% rise in wages and salaries which is the largest since last November. Spending rose 0.3% led by a 1.1% gain in durables that is tied to vehicle sales. The savings rate is also healthy, up 2 tenths to 4.9%. The growth side of this report is very favorable and marks a good beginning for the third quarter, but at the same time, inflation pressures remain stubbornly dormant.  Personal income is the dollar value of income received from all sources by individuals. Personal outlays include consumer purchases of durable and nondurable goods, and services.
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